China has pledged $1 billion in new grant money to Sri Lanka to address complaints that its investment was aimed at furthering its own strategic interests rather than Colombo's.

The main dispute is over a port city project in Colombo that the government has suspended pending a review of approvals. But other road and port projects have come under scrutiny since the President Maithripala Sirisena took office in January.

A cabinet note seen by Reuters said the government had compiled a list of 35 projects which had been awarded without competitive bidding on the grounds that they were of critical importance to rebuilding after the island's civil war.

A government minister told Reuters 28 of the listed projects were Chinese-funded.

"The cabinet sub committee on economic affairs has appointed an official committee to review these proposals and submit a report," the note said.

India, which has long had close ties with Sri Lanka, has been unable to match Beijing's financial and technical assistance.

Sri Lanka's cabinet decided on Friday that all future projects will be awarded on the basis of open tenders, spokesman Rajitha Senaratne said.